Managed Account Trading

[alek barsu]

Back in 2006, When I first started trading client�s accounts as a separately Managed Account, I always thought that there is a need of a structure where I can trade X numbers of account through a single terminal. The best solution given by my, the then broker Fxpro was a Multi-terminal. I was initially happy, but soon I noticed that a multi-terminal by metaquotes is not a good solution for traders who want superior execution and instant fills of orders on client accounts. Also the fact that I cannot add more than 50 sub accounts on Multi-terminal. And neither can I run automated robots on the master account. I was always anxious for a better solution and asked my broker that if they can provide some other solution where I can get my system up and running on a virtual private server or a hosted dedicated server. The only answer I received from their technical team that it was still under development. At that time a New broker with large no of promises and comprising of a top level dedicated IT team surfaced, The broker is none other than Axitrader of Australia holding a ASIC license. Since my current broker was very lagged in updating their technological offerings, I was forced to switch to Axitrader & from the On-set they offered me Multi-Account Manager & a Corporate Money manager partnership. Most of my clients were from Middle east & India , So I never had any issue of licenses that may be needed by other Money managers to trade on behalf of their client�s. Another major advantage I enjoyed with Axitrader is that the ability to auto-debit performance fee from client�s account with the execution of an LPOA document (Limited Power of Attorney). This had to be signed by my clients and was to be faxed or sent via email to Axitrader�s office.
After starting with only 22 clients, I managed to add another 40 clients very easily by showing them my previous track record & trading history. At a MAM manager there is no upper limit about how many sub account that can be added, I was already trading at a pool of funds that was almost 5.5 million USD. I used to charge my clients variable performance fee anywhere in the range 25 to 40%, And by the end of 2011, I have already accumulated 5 million USD in net revenue. In the year 2013, I started my own trading floor and researched about hundreds of trading methodology including the safe methods such as triangular arbitrage, Latency arbitrage. And had my own team of programmers that developed complicated math based expert systems that automatically made trading decisions on my mam accounts. By the mid of 2014, I Had almost 18 tier One brokers tied with my company in order to offer managed account trading solutions. But then suddenly I had an issue of licenses because I was involved in solicitating clients from some regions such as Europe, United states & Uk that require my company to be regulated under the respective jurisdiction. So this hampered the growth of our company by quite a margin. But we continued to progress without any other major setback. And by the End of 2014, I already had accumulated 20 million USD. And was in a thought to have our own Forex brokerage firm. But on January 2015 , 15th an unexpected event occurred in the history of forex market for the first time that catapulted many brokers out of the game. The Swiss National Bank decided to lower the Floor and this caused a huge surge in the liquidity and affected in incorrect fills, Huge losses almost in millions of dollars, Many brokers and even one of large player Alpari Uk went out of business. We suffered a Net loss of 5.4 million usd when our brokers dishonoured the trades. And Finally I learned that we have to be always careful to protect ourselves these type of risk events. And always keep some Security money to protect ourselves in the time of crisis